Glanbia’s latest volatility management offering

Published 10 November 15

Glanbia has announced a new fixed milk and feed price scheme for suppliers in the Republic of Ireland. The scheme is scheduled to run for 18 months commencing in January 2016, encompassing the peak production period for the next two seasons.

Milk sold under the scheme will receive a base price of 30.25 cents per litre (cpl) based on reference milk constituents of 3.6% butterfat and 3.3% protein. This compares quite favourably to Glanbia’s base price for September 2015 of 24.00cpl. According to Glanbia, based on average constituents of their suppliers on manufacturing contracts, the scheme could pay a price of 32.53cpl.

Combined with the ability to lock in future feed prices, this scheme provides farmers with the ability to protect a portion of their margins from negative price changes, depending on the volumes they allocate to the scheme.   

Since their introduction in 2011, around 20% of milk supplied to Glanbia (1bn litres) has been sold through fixed margin schemes.